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Deutsche Bank to refuse to pay for trainees and NQ lawyers after panel overhaul

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Bank's panel firms to miss out on fees for junior lawyers as US fee practice crosses Atlantic

Deutsche Bank is to stop paying panel law firms for work carried out by newly qualified (NQ) lawyers and trainees, Legal Week can reveal.

The decision, which will apply to firms appointed as a result of Deutsche’s current panel review, represents a first major move by a bank on this side of the Atlantic not to pay for junior lawyers, a practice known to be more commonplace in the US.

Deutsche is nearing the end of its global panel review, which is carried out every two years, with a host of firms set to be reappointed to the roster, including Latham & Watkins, White & Case and Hogan Lovells.

The new payment plans – set out in the terms of the tender process, according to partners at panel firms – have upset some of those pitching for the roster.

One partner told Legal Week: “It has annoyed a lot of people. The process was more aggressive.”

Such demands, although rare in the UK market, are more prevalent in the US, with a 2011 survey by the Association of Corporate Counsel for The Wall Street Journal finding that more than 20% of 366 in-house legal teams had at some point refused to pay for the work of first or second-year lawyers.

Another partner added: “This is something I have seen for the first time this year. I think it is fair enough for trainees, but for NQs it seems very unfair – they are proper solicitors, so why should they not be paid? I have heard about this at other banks; usually in the US, but never in Europe.”

Deutsche’s review is being led by Rose Battaglia, the bank’s New York-based global COO for legal and compliance, on behalf of co-general counsel Simon Dodds and Christof von Dryander, who have held the joint role since January 2016.

Legal Week reported earlier this month that Latham, White & Case and Hogan Lovells are set to be reappointed to Deutsche’s line-up, alongside a raft of firms named on the panel two years ago, including Freshfields Bruckhaus Deringer, Linklaters, Allen & Overy, Slaughter and May, Simmons & Simmons, Ashurst and Clifford Chance.

Other US firms likely to maintain spots include Mayer Brown and Cleary Gottlieb Steen & Hamilton. The last review in 2015, which was led by former general counsel Richard Walker, was dubbed ‘Project Eagle’.